Often one of the first questions asked by individuals interested in pursuing accounting careers is what is the difference between an accountant and an auditor. If you fall into this category, don’t feel alone. While these two occupations are similar and often confused, there are some noticeable differences between being an accountant and an auditor. Learn more below.
What Do Accountants Do?
Accountants take care of the daily financial transactions for a company or business. Their duties can cover various tasks that range from incoming earnings to outgoing payments. They may be in charge of figuring payrolls and tax deductions, paying vendors, implementing cash, check and electronic payments, preparing tax returns and reconciling the books at year end. An accountant’s duties may also vary depending on what type of accountant they are. For instance, Princeton Review states that the duties of a tax accountant are very difference from that of a general accountant.
What Do Auditors Do?
Auditors often perform many of the same tasks as accountants, although they also have very different responsibilities. The Houston Chronicle states that while auditors and accountants have similarities and differences, many companies use these two individuals interchangeably. So, what exactly is the difference between an accountant and an auditor? The best answer to this question is that while both these professionals are responsible for the accounting processes of a company, an auditor is generally responsible for reviewing the work of the accountant.
What is the Difference Between an Accountant and an Auditor?
As similar as these two occupations are, there are several differences between an accountant and an auditor.
• Accountants are usually employees of the company for which they work, whereas, auditors are often hired from an outside firm to verify the accuracy of the accountant’s work. Although not always the case, an auditor generally has no financial connections to the company.
• The work done by accountants is done on a daily basis, whereas auditors usually perform quarterly or annual accounting work. Auditors are often brought into a company after a specific situation, such as suspected fraud.
• The work performed by accountants is governed by international accounting standards, but auditors’ work is regulated by auditing standards.
• Accountants are generally a requirement for a business; however, hiring an auditor is an option.
• Accountants create financial statements for the company at year-end. These statements create a picture of the financial stability of the company. An auditor will look over the financial statements and determine their accuracy.
• Because accountants work for a specific company, they generally have their own office or workspace. Auditors, on the other hand, often move around from company to company.
What is the Difference Between an Accountant and an Auditor Regarding Education?
The educational requirements are almost the same for accountants and auditors. According to the U.S. Bureau of Labor Statistics (BLS), both of these occupations require completion of a bachelor’s degree in accounting. Some companies may prefer their accountants/auditors have master’s degrees, such as a Master of Science in Accounting or a Master of Business Administration with a specialization in accounting. There are several certifications available to graduates of this program such as Certified Public Accountant, Certified Management Accountant or Certified Internal Auditor.
Both of these careers can be ideal for someone who enjoys working with numbers. While it’s important to understand the difference between an accountant and an auditor, if you plan to earn your Master’s in accounting or your CPA, you will most likely have the option of working in both accounting and auditing at different points in your career.